Vice Media, the Brooklyn-based digital media company founded by Shane Smith, has hired bankers to put the company up for sale, according to a report.
Several buyers have expressed “preliminary interest” in buying Vice outright, CNBC reported late Monday. Vice, which is saddled with outstanding debt and failed to go public via a special acquisition company, is also looking into selling itself in parts, the report said.
Vice, the once-high-flying, digital media darling valued at $5.7 billion, is currently shopping its lucrative content studio business and hired banks PJT Partners and LionTree for the transaction, the Information reported Friday.
According to CNBC, Vice’s most desirable assets are likely to be its content studio and creative advertising agency, Virtue, which includes Pulse Films, known for producing films like “Pig,” starring Nicolas Cage, documentary “Bikram: Yogi, Guru, Predator” and Beyoncé’s “Lemonade.”
Vice attempted to go public via a SPAC last year, reaching an agreement with 7GC & Co Holdings. It targeted a valuation of about $3 billion including debt when it attempted to go public last year. If Vice agrees to a deal to sell the entire company, it’s likely to garner a price significantly lower than that, sources told CNBC.
Vice’s SPAC plans fell through as the market cooled and investors weren’t sold on Vice’s financials and prospects as a stand-alone public company.
Multiple sources with knowledge of Vice’s business told The Post at the time that going public was more of a “fantasy” than a reality for the company, which at its height in 2017 had a bloated valuation of $5.7 billion after private equity investor TPG gave the company a $450 million injection of capital. But that infusion came at a cost, as Vice agreed to hefty future repayments, according to reports.
Since then, Vice has stumbled in its effort to grow its business, which has been marked by controversy, questionable deals and cost cuts.
“Nobody in the industry seriously thought that Vice was ready to go public. That was never going to happen,” said a person with knowledge of the matter at the time. “The company has been in a never-ending cycle of layoffs, pivots and emergency cash infusions for half a decade. It appears the downward spiral is still ongoing.”
Founded as Vice Magazine in 1994 by the bombastic Smith, the company steadily made its push to video and TV. By 2013, Vice had its own weekly news show on HBO. Three years later, it launched a cable channel, Viceland, which slumped in the ratings.
Under Smith, Vice had big dreams of becoming a media juggernaut with revenue touching $1 billion by 2015. But a series of critical reports in 2018 on how Vice was built on bluffs and smoke and mirrors by Smith, who reportedly oversaw a toxic work environment for female staff, tarnished the company and its founder.
Vice’s fortunes were souring and by 2019, the HBO show and the cable channel were canceled, news leaked out that Vice ponied up $1.87 million to settle a pay-disparity class-action lawsuit filed by female employees, and Smith was replaced as CEO by A&E boss Nancy Dubuc.
Dubuc had been charged with changing the company’s so-called bro culture and she was tasked with integrating the struggling, girl power-focused media giant Refinery29, which the company acquired in 2019 in an all-stock deal. That deal not only lowered the overall valuation of Vice to about $4 billion at the time, but it also baffled media watchers.
“The cultures are oil and water. Misogyny meets feminism,” a digital executive told The Post at the time. “When they merge, there will be very deep cuts on the Refinery side,” predicted the executive. “Vice will gut them.”
The source wasn’t too far off, as there have been several rounds of reorganization under Dubuc across the company, which has not only helped cull costs, but also grow revenue. The Wall Street Journal reported last year that Vice has estimated it will hit $1 billion in revenue by the end of 2023.
Now, Vice is mulling a sale as it seeks liquidity for investors and to help pay back about $1 billion in debt.
CNBC said discussions with potential buyers are ongoing and that no deal is assured or imminent. TPG isn’t interested in buying all of Vice and instead is looking to monetize some of its investment, the report said.
A Vice rep told the publication: “The market is very active in the studio space right now and we have built a scaled, global world-class studio business that’s generating inquiries — when there’s that kind of interest, we have to consider it for our investors. Beyond that, there’s nothing to comment on.”